SINGLE BLOG ARTICLE

Labour Law Update 6

Welcome to the next edition of the Labour Newsflash. This week started with the unfortunate announcement that South Africa’s unemployment rate has hit a 13 year high of 27.7%. This unemployment rate is the highest since September 2003 and is up 1.2% from the fourth quarter of 2016. What is very concerning is that the youth unemployment rate has risen even further to 38.6% with 58% of unemployed people in South Africa being aged between 15 and 34. This should be very disconcerting for all South Africans, as this age group is the future of our country.

Recently we were asked by a client to do an analysis of the retrenchments done over the past 7 months. Whilst one expected job losses, we were shocked to see the analysis highlighting huge losses throughout the industries of South Africa.

The sad reality is it is envisaged that the economy will get worse before it gets better. No doubt the linkage here will lead to even more job losses.

It is clearly the time for business and labour together with government to look for sustainable solutions for this crisis. We need to find solutions supported by legitimate business growth and private-public partnerships. Add to this we need to be innovative in how collective bargaining occurs and ensure that there is realisms in the various approaches, balancing the survival of the business with the wellbeing of the employees.

In this tone of innovation, we have approached Johnny’s Mid-Year Labour Law Update seminars taking place over the course of June, in a fresh manner. Delegates will receive information packs in advance, providing an opportunity to prepare questions and forward those questions to Johnny, as well as various new approaches to the day’s interactions.

The schedule for the Mid-Year Labour Law Update is as follows:

East London – 14 June 2017

Johannesburg – 21 June 2017

Cape Town – 23 June 2017

Durban – 27 June 2017

Port Elizabeth – 30 June 2017

We hope that we will see you in the various regions, Johnny across the country and Grant in attendance in Johannesburg.

In the event that you have not yet registered, please click here for a registration form for the seminar.

Below are two of the cases that Johnny will discuss at the Mid-Year Labour Law Update.

Case 1

DISMISSAL FOR PROTECTED STRIKE ACTION

The employer remunerated drivers who transported its clients’ products in line with how lucrative the contracts they serviced were.

After a contract terminated, the employer transferred its drivers, who had been attached to the contract, to various other contracts. It then required them to sign new contracts of employment in terms of which their wage rates were reduced.

The majority of the drivers, signed the new contracts, but 7 refused to do so as the employer adjusted their wage rates without their consent.

The union made certain demands, one of which was that the employer should restore the 7 employees to their agreed wage rates and pay them back-pay for the period during which it had paid them at reduced rates.

Another demand was that the employer should pay all drivers equally irrespective of the contract to which they were attached.

The union followed the dispute resolution procedures of the LRA and issued a strike notice. The LAC held that the workers could only strike in respect of the wage cut demand and the wage discrepancy demand, but not in respect of the other two demands.

The employer regarded the strike as unprotected but, as a gesture of its goodwill to end the strike, undertook to restore the 7 employees to their agreed wage rates and pay them the back-pay. It refused to do anything about the wage discrepancy demand.

It called upon the workers to return to work failing which they would be summarily dismissed.

The workers did not return to work and were dismissed.

The LC held that the strike had become unprotected when the employer undertook to restore the employees to their previous rates and dismissed the workers’ unfair dismissal claim.

Their appeal to the LAC failed.

However, the Constitutional Court considered whether the employer had promised to put them on their wage rates in terms of their contracts of employment. The answer was no. The employer promised them something much less. It promised them that they would be put on those wage rates “as a gesture of its goodwill, and in order to end the strike”.

They were promised something based on its goodwill that could not be enforced in law.

Therefore, the basis upon which the promise was made could not and did not change the protected strike into an unprotected strike.

The dismissals were thus found to be automatically unfair and they were retrospectively reinstated.

Comment:

Highly technical judgment and very expensive retrospective reinstatement. You need an outside ombudsman in these cases.

Case 2

CONSTRUCTIVE DISMISSAL

The employee, a Cashier, was requested to undergo a polygraph test after the employer discovered that money had been taken from her till.

When her manager informed her that she had failed the test, he advised her to resign rather than be embarrassed by defending herself in a disciplinary hearing.

The employee wrote out a letter of resignation, but shortly afterwards had claimed that she had been constructively dismissed, and sought compensation.

The Commissioner held that the first issue for determination was whether the employee had resigned under duress. A party relying on duress, to void an agreement, must prove that she is confronted with a threat of evil or intolerable moral pressure.

The Commissioner found that the manager had done no more than present the employee with an option.

Mere frustration or tension will not found a claim of constructive dismissal. The test for constructive dismissal is objective.

Viewed thus, the circumstances that had prompted the employee’s resignation could not be said to be intolerable.

The employer had also not acted unfairly by refusing to allow her to retract her resignation because she had taken so long to make that request.

The Commissioner ruled that the employee had failed to prove that she had been dismissed.